Answer to Question #46601 in Economics of Enterprise for Hatutale Timotheus

2014-09-17T05:57:40-0400

Question #46601

you are provided with the following:Marginal propensity to save (MPS) =0.2Tax rate (t) =0.2 Autonomous saving=-50investment spending (I) =100Government expenditure (G) =150exports(X) =120autonomous imports=30marginal propensity to import (m)= 0.15Answer the following question: (a) derive the consumption equation from the information given.(b) calculate the equilibrium level of income using the AD=AS approach. (c) calculate the equilibrium level of income using the injection = withdrawals (J=W) approach.(d) calculate the fiscal surplus (or deficit) at the equilibrium level of income.(e) calculate the value of net export at the equilibrium level of income.(f) what would the level of income have to be net exports are zero?(g) what is the value of the multiplier in an economy: i. consisting only of households and businesses (no government or foreign sectors) ii. consisting of households, businesses and the government (but no foreign sector) iii consisting of both C,I,G and foreign sector